Invoice factoring companies9/12/2023 ![]() ![]() ![]() When considering factoring fees, transparency is very important – factoring companies that don’t make it simple to calculate their all-inclusive fees are probably doing this for their own advantage. Harper Partners’ fees typically range between 1-3% per month. They won’t ever hear from us. Payment for invoices are directed to an account we set up under your company’s name.įactoring fees range from 1-5% per month on the face value of the invoice. If you prefer we don’t talk to your customers at all, that’s not a problem. We have account managers who politely follow up on outstanding invoices, at your direction. Additionally, funds from factoring invoices can augment your available bank credit if needed.įinally, Harper Partners can help you collect on your receivables, but only if you want us to. Ultimately the factoring company is underwriting your customers as much as they’re underwriting your business. Furthermore, the high approval rate allows many to qualify for factoring even if they’ve been declined for a bank loan. The quick speed to funding allows a company to take advantage of immediate business opportunities such as large orders or timely expansion. The simple application process eliminates the major hurdles that banks place on small businesses when applying for a loan. And much, much less paperwork and headache than raising equity. Seamless access to funding allows a business to meet payroll, grow unimpeded, earn supplier discounts for early payment or bulk buys, or invest in new equipment to improve productivity.įactoring applications take much less time and paperwork than bank loans. And in terms of size, Harper Partners can fund up to $5 million credit lines, which is comparable to what most banks are willing to provide small businesses. The effective rate businesses pay through factoring is much better than other financing alternatives that don’t rely on their customers’ creditworthiness.įactoring also comes with a simpler application process, quicker time to funding, and much higher approval rate compared to bank financing. This is great for early stage or not quite profitable businesses selling to established companies or the government. No debt equals no restrictions.Īnother benefit of factoring is that the factoring company considers the credit quality of the applying business’s customers. A business sells its accounts receivable, receives cash and that’s it… There are no limitation to what the business can do with the funds. In contrast to bank financing, invoice factoring is not debt. Opens growth opportunities - invoice financing gives growing SMEs upfront cash to invest and grow rather than suffer the cash flow problems caused by delayed invoice payments.Invoice Financing Compared to Traditional Bank Financing.No need to chase the Buyer - if the Exporter applies for non-recourse financing, the financier will own the invoice, chase late payment and suffer the loss if the invoice isn’t paid.Invoice factoring companies advance funds against individual invoices based on the Buyer’s creditworthiness, so applicants are much more likely to be approved for financing. ![]() Greater chance of approval - banks are unwilling to lend money to small companies involved in international trade as the risk of non-payment is higher.No collateral needed - the invoice finance loan uses the invoice itself as collateral and thus is not a risk to any other business assets.Instant cash flow - some factoring companies can deposit funds within 48 hours of approval, meaning SMEs can be paid soon after the invoice has been issued rather than waiting for payment from the Buyer. ![]()
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